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Nigerian Government Increases Electricity Tariff Again

The Nigerian Government has increased the electricity tariff payable by power consumers across the country.

The Nigerian Electricity Regulatory Commission authorised the new tariff, as the rise which differs based on different consumer classes took effect from January 1, 2021.


According to The PUNCH, the NERC announced the tariff hike in its December 2020 slight review of the Multi-Year Tariff Order and Minimum Remittance Order obtained in Abuja on Tuesday.

The tariff increase is taking effect just two months after the government through NERC implemented a hike in November 2020, which saw widespread opposition.

The MYTO order containing the latest tariff hike, Order NERC/225/2020, was signed by the new Chairman of NERC, Sanusi Garba, and it replaces the previous Order NERC/2028/2020.

While giving reasons for the new tariff hike, the commission stated it measured the 14.9 per cent inflation rate rise in November 2020 and foreign exchange of N379.4/$1 as of December 29, 2020.

Others were available generation capacity, the United States inflation rate of 1.22 per cent and the Capital Expenditure of the power firms before the tariff was raised.

Findings showed that the reviewed Service-Based Tariff got an increase in the rates payable by the various classes of electricity users unlike the one of November 2020, which exempted low electricity consumers.

The commission also said that the fresh tariff would be effective till June 2021 while a Cost Reflective Tariff would start from June to December 2021.

The NERC had confirmed last month that it was implementing a review for another tariff, hence the latest order announcing an increase in the rates payable by consumers.

In September last year, the commission raised electricity tariff but this attracted stiff opposition from the organised labour, as the unions threatened to embark on a nationwide strike.

After a series of negotiations, tariff was reduced based on consumer classes and the hours of power supply received by an electricity user.

On November 1, 2020, power distribution companies commenced the implementation of the revised electricity tariff that was jointly agreed upon by organised labour and the Nigerian government.

The Nigeria Labour Congress had told The PUNCH that the Nigerian government would not revert to the September 1, 2020 service reflective tariff that led to a widespread outcry across the country.

Deputy President, NLC, who doubles as General Secretary, National Union of Electricity Employees, Joe Ajaero, stated that the September 1, 2020 hike in tariff had been reviewed downwards in most categories.

But two months after implementing the revised tariff that saw various levels of increase in rates, the government has again increased the tariff.

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